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5.Troubled companies

This category contains 229 posts

12 Dec 2018 (AFR) – Treasury Wines’ painful $4 billion spillage

[COMMENT: Technical analysts (aka chart readers) could have spotted a potential loser here, some months before the share price tanked. They would have trimmed any losses and quite the stock.] (12 December 2018, AFR, p17, by Simon Evans) ‘Old-school investors who believe share sales by directors and top executives are a potential danger signal have … Continue reading

10 Dec 2018 (AFR) – ‘Frank Squared’: Circularity of Quintis deal examined in receivers’ hearings

[COMMENT: This interesting news story brings some great insight into what can sometimes happen behind the scenes with managed funds.] (10 December 2018, AFR, p20, by Vesna Poljak) ‘The Abu Dhabi Investment Council was able to exit $10 million of plantations managed by the sandalwood grower Quintis by virtue of a three-way transaction financed by … Continue reading

10 Dec 2018 (AFR) – AMP class action beauty parade turns ugly

(10 December 2018, AFR, p19, by Misa Han) ‘On May 9, a day before AMP’s annual general meeting, boutique class-action specialist Quinn Emanuel filed the first class action against the wealth giant in the NSW Supreme Court.’ <snipped…> ‘It turns out Quinn Emanuel wasn’t the only law firm working towards a tight deadline. At 10.56 … Continue reading

7 Dec 2018 (TheAge) – Freedom Insurance shares halved on liquidity warning

(7 December 2018, The Age, Business, p28, By John Collett & Sarah Danckert) ‘Investors have wiped out almost half embattled Freedom Insurance Group’s market capitalisation after it warned it may face a liquidity shortfall and admitted it was under investigation by the corporate watchdog for misconduct highlighted by the banking royal commission. The company said … Continue reading

4 Dec 2018 (AFR) – RCR Tomlinson creditor claims forecast at $630m; investors last in the queue

(4 December 2018, AFR, p14, By Jenny Wiggins) ‘RCR Tomlinson’s administrators are likely to be hit with about $630 million in financial claims after the engineering group collapsed but most creditors will only get paid if the company receives “strong” offers for its asset sales, McGrathNicol has warned. Shareholders who hold RCR stock are at … Continue reading

4 Dec 2018 (AFR) – Slowdown hits third of smaller malls as e-commerce bites: Little Guns report

(4 December 2018, AFR, p31, by Nick Lenaghan) ‘One-third of the country’s sub-regional shopping centres failed to increase their annual turnover in the past year as the retail sector faces pressure from disruption and a cyclical slowdown. Sub-regional malls, defined as those with between 20,000 square metres and 50,000sq m in retail space, are often … Continue reading

4 Dec 2018 (AFR) – Roger David retailing chain leaves a $30m hole for landlords

(4 December 2018, AFR, p17, By Simon Evans) ‘Thirteen shopping centre landlords have been left with a combined $30 million problem after the demise of menswear retailer Roger David. Structural shifts in the sector are weakening the position of shopping centre and shop owners as the percentage of online shopping transactions rises and $2 billion-plus … Continue reading

4 Dec 2018 (TheAge) – Laura Ashley collapses for the second time in two years

(4 December 2018, The Age, Business, p25, by Patrick Hatch) ‘British homeware and fashion brand Laura Ashley’s Australian business has gone into administration – the second time it has collapsed in two just years. The company appointed KordaMentha as voluntary administrators on Monday, which has put its 18 stores and the licence to operate the … Continue reading

3 Dec 2018 (AFR) – Kingscliff hedge fund Goldsky’s ‘plastic surgery spree’ forced ASIC action

[COMMENT: Have you ever wondered if your managed fund monies are being invested appropriately? It has been alleged that some funds aren’t. Read the details below.] (3 December 2018, AFR, p1, By Jonathan Shapiro) ‘Goldsky, the Kingscliff-based hedge fund that is being sued by US regulators, spent more than $200,000 on cosmetic procedures, beauty treatments, … Continue reading

28 Nov 2018 (TheAge,SMH,MONEY) – RCR Tomlinson’s collapse has lessons for retail investors

[COMMENT: This article from Marcus Padley includes some great comments and insights – well worth reading the full article.] (28 November 2018, The Age, MONEY supplement, p2, By Marcus Padley) ‘Last year, RCR Tomlinson was a billion-dollar company. Last week, it went into administration. RCR went bust with a market capitalisation of $231 million. Two … Continue reading

23 Nov 2018 (AFR) – RCR Tomlinson to be split up and sold after ‘staggering’ collapse

(23 November 2018, AFR, p19, by Jenny Wiggins) ‘Engineering group RCR Tomlinson will be sold after being put into administration because it could not afford to complete its solar farm projects, despite the company raising $100 million from investors just three months ago. Administrators McGrathNicol will put RCR up for sale immediately, and it is expected that … Continue reading

12 Oct 2018 (AFR) – US retail giant Sears prepares to file for bankruptcy as shoppers go online

(12 October 2018, AFR, p14, by Jessica DiNapoli and Mike Spector) ‘New York | Sears Holdings is preparing to file for Chapter 11 bankruptcy protection in the coming days following years of declining sales, sources said, casting doubt over the survival of what was once the world’s largest retailer. The bankruptcy filing would end a … Continue reading

28 Aug 2018 (AFR) – Big Un appoints Deloitte as administrator

(28 August 2018, AFR, p19, by Jonathan Shapiro) ‘Big Un Limited, the controversial ASX listed online video producer has called in the administrators, dashing the faint hope among shareholders that they will recover their money. Deloitte Restructuring Services said it was appointed on Friday in a statement posted to the exchange on Monday. It comes … Continue reading

21 Aug 2018 (AFR) – Venezuelans nervously await drastic new economic measures – Workers promised 2000 percent pay rise

(21 August 2018, AFR, p12, by Scott Smith) ‘Caracas | Venezuelan shopkeepers and consumers are nervously awaiting the launch of dramatic reforms announced by President Nicolas Maduro to rescue a downward-spiralling economy, including a new currency and a more-than-3,000 per cent hike in the minimum wage.’ Read more at AFR.com (might need AFR login access, … Continue reading

15 Aug 2018 (AFR) – Downward spiral: Turkey’s toxic situation has markets spooked

(15 August 2018, The Age, Business, p35, by Ambrose Evans-Pritchard) ‘The famous Dornbusch’s Law of financial crises is that they take longer to hit than you think, but then unfold much faster than you ever thought possible. Every hedge fund in London knew that Turkey was an accident waiting to happen. It was odds-on favourite … Continue reading

9 Aug 2018 (AFR) – ‘Cloud cuckoo land’: Brookes lashed in Myer profit guidance class action

[COMMENT: Some investors are firm believers in particular stocks. Over the years, some investors in Myer Holdings would have been firm believers. Many of these investors ignore warning signs that things are not right, and continue to hold the stock. I am sure there were many investors in Myer throughout time. But some investors would … Continue reading

28 July 2018 (AFR) – Facebook’s day of reckoning rocks new media

(28 July 2018, AFR, p12, by Sarah Frier) ‘After all the controversy Facebook has generated in recent months, it seemed almost inevitable that at some point, the social media giant would get what it had coming. A reckoning. Wednesday’s disappointing earnings report and Thursday’s historic 19 per cent stock drop appeared to be a fitting conclusion … Continue reading

25 July 2018 (AFR) – Kogan.com says earnings to rise more than 90pc

[COMMENT: Even with positive news and company profit reporting, if the actual numbers are less than the analysts predicted and expected, then the share price can take a hit. Here is a good case study example.] (25 July 2018, AFR, p16, by Sue Mitchell) ‘Shares in Kogan.com fell to seven-month lows after the online retailer missed profit … Continue reading

11 July 2018 (AFR) – Melbourne home builder Bayside Construct goes into administration

[COMMENT: Snippets from this new story provide a scary insight into the current state of health of the building industry.] (11 July 2018, AFR, p29, by Michael Bleby) ‘Melbourne builder Bayside Construct, which won a national award last year for the country’s best medium-rise residential development, has collapsed under debts of about $20 million. Cor … Continue reading

2 June 2018 (AFR) – Ten years on from the GFC, what happened to the once mighty Babcock & Brown?

(2 June 2018, AFR, p15, by Su-Lin Tan) ‘June 12 2008 is a date seared into the memory of everyone who worked at Babcock & Brown, a financial wizard that operated across the globe, buying up high end assets; wind farms, power companies and a lot of real estate. B&B’s share price, that had soared … Continue reading

31 May 2018 (AFR) – Where technology has hurt property: empty office parks

(31 May 2018, AFR, p44, by Nick Corasaniti) ‘The era of suburban business campuses looks over – Perched off a busy road in northern New Jersey with sweeping vistas of a vast reservoir sits a new relic of the suburban panorama: the international headquarters of Toys “R” Us slogging through its final days after the … Continue reading

24 May 2018 (AFR) – Big Un investors turn dark after ‘life changing’ losses

[COMMENT: This is another very good example of why we should not be committing a large chunk of our investing portfolio to just one stock. No matter how convincing or compelling the story from the company, there is a possibility that something might go wrong.] (24 May 2018, AFR, p52, by Jonathan Shapiro) ‘ “Think … Continue reading

11 May 2018 (AFR) – Godfreys hoists white flag on John Johnston takeover bid, downgrades profit

(11 May 2018, AFR, p27, by Simon Evans) ‘Ailing retailer Godfreys has warned of an alarming 27 per cent tumble in sales in the past two weeks as it revealed a hefty profit downgrade of at least 30 per cent after a disastrous switch in its television advertising approach away from discount sales. The vacuum … Continue reading

27 Apr 2018 (TheAge,SMH) – Myer and DJs falling sales hit retail landlords

(27 April 2018, The Age, Business, p25, by Carolyn Cummins) ‘Department stores are weighing on the results of shopping centre landlords, with sales contributions in the red for the three months ending March 31. Sluggish consumer sentiment, ongoing complaints of bad in-store service and a demise in the concept of a ”one-stop-shop” are putting the … Continue reading

25 Apr 2018 (TheAge) – One move that would go a long way to fixing financial advice

(25 April 2018, The Age, Money supplement, p1, John Collett) ‘There are no quick fixes to curb recurrences of the shocking revelations at the banking royal commission concerning financial advice. But there is a move you’d think would be obvious: licence planners individually.’ <snipped…> ‘… I recall the experience of a 61-year-old cancer patient. She showed me her … Continue reading

24 Apr 2018 (AFR) – iSelect shares dive over 60pc after earnings downgrade, CEO departure

(24 April 2018, AFR, p25, by Yolanda Redrup) ‘Comparison website iSelect is searching for a new chief executive after declaring a huge downgrade to profit guidance due to a slump in activity that shows no sign of improving, even into the company’s busiest time of the year. ‘ Read more at AFR.com (might need AFR … Continue reading

10 Apr 2018 (TheAge) – Half of Myer investors stuck with shares they can’t sell

[COMMENT: Here is a salutary lesson for investors who purchase shares in a company, including supposed blue chip stocks. In the case of Myer, anyone who didn’t spot the declining share price over a long period, or who decided to hold on and prayer for a turn around, if the share parcel value has declined … Continue reading

29 Mar 2018 (AFR) – Property deals jeopardised by Deposit Power deposit guarantee uncertainty

(29 March 2018, AFR, p57, by Duncan Hughes) ‘Thousands of property buyers caught in the collapse of Deposit Power are being warned by liquidators that they cannot be told when or how much of the original value of their deposit guarantee bonds will be paid. That means growing risk that the property deals will be … Continue reading

29 Mar 2018 (AFR) – Project Group collapse just the first of many in overheated market, subbies warn

(29 March 2018, AFR, p57, by Michael Bleby) ‘The collapse of builder Project Group is the first of many to come in the overheated Victorian construction market, according to subcontractors membership group Subbies United. Conditions that triggered Melbourne-based Project Group to go into voluntary administration last week, such as fixed fees and rising costs, were … Continue reading

23 Mar 2018 (AFR) – CBL collapse could leave builders and property owners exposed

(23 March 2018, AFR, p37, by Duncan Hughes) ‘Builders and apartment owners could face massive bills to replace dangerous external cladding following the collapse of giant New Zealand-based insurer CBL, according to lawyers and insurers. Aggrieved property buyers wanting compensation for poor workmanship, substandard materials, or non-completion because of the financial collapse of a builder could … Continue reading

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